Drop the Money and Back Away Slowly

Explain this to your daddy: The State of Texas has $5.2 billion more money to spend over the next two years than it had during the last two years. There is probably enough money available for the state to continue to do the things it already does, even when you factor in inflation and other increases.

Nevertheless, some lawmakers—aided and abetted in some measure by the very press corps to which we proudly belong—are talking about tax increases and raids on the Rainy Day fund and even a special session on the budget. When you explain this, Daddy's not gonna follow your reasoning.

The budget is on a fast track this year, and there are a number of new players in the process. That's part of the reason for the early Chicken Little talk. Such talk is a normal phase of budgeting, but it usually comes later. There's a period where it looks like there will be some money available. People imagine and sometimes spell out uses for it. Then there is a period when the high priests of the budget say the abundance is a mirage, that there's no real money there. People pare down their plans.

That's how it's supposed to work. This time, the chief budgeteers have sent out mixed signals. They said there would be only $300 million for discretionary spending, which presents a small margin of error. Then they said there would be $1 billion, which isn't a ton, but is an improvement. Next, they said, whoops, some Medicaid stuff came up and pushed the spending plans $300 million into the red.

In the resulting confusion, it is possible to find folks who'll testify to the need for big cuts or a tax increase. Or to locate testimony that squirrels tucked away well over a billion dollars for teacher insurance and prison and state employee pay raises, and so on. Too, there are those who were listening carefully when the comptroller said soaring natural gas prices would result in a giant rainy day deposit of $904 million. That's like putting up a neon sign with the word PLUNDER in red letters.

Medicaid blowouts included, we tend to believe the number-crunchers who see a pretty decent amount of room for new spending. That's not to say there's a giant surplus to play with; this is nothing like what the Legislature had at its disposal in 1997 or 1999. But there should be more than enough to cover emergency spending, Medicaid blowouts and some expensive school finance stuff, with some money left over for some of the bigger things on various wish lists.

Gov. Rick Perry is apparently listening to some of those same people. He took the unusual step early in the week of writing a rumor-squelching letter to Lt. Gov. Bill Ratliff, Speaker Pete Laney, Senate Finance Chairman Rodney Ellis and House Appropriations Chairman Rob Junell. Perry started by saying there is no need for a tax increase. He defended the tax cuts promoted two years ago by his predecessor, cuts that have been blamed during the last several days for anything that's wrong with the state's current bank balances. And then he said that the uncertainty in the economy makes it unwise to raid the Rainy Day fund, even if it is supposed to top $1 billion in two years.

Perry has already laid out his plans for some of whatever surplus exists, so he's one of the people in line for money, if there is some. Even so, he's signaled that he won't go to dramatic lengths to get more money, and won't look kindly on legislative raids, either.

We heard at least one legislator this week saying that the state should undo the tax cuts of two years ago, on the theory that the state needs the dough. It's possible to do that, but lawmakers put a lot of sugar on that package in 1999, and they would have to take the sugar back with the tax break. That means, in short form, that they would have to short-sheet public education by $1.4 billion and take away sales tax breaks for back-to-school stuff and a long list of medications. Not likely.

Solving Medicaid

The Medicaid mess has prompted the state's chief budgeteers to assemble a SWAT team with instructions to find out just what the H-E-Double-Toothpicks is wrong. Getting decent projections of what those programs will cost is as easy as nailing Jell-O to the wall.

As we've pointed out, the numbers have changed dramatically since September, and there aren't any good reasons to hope future estimates won't cause similar problems. Because of the jiggling in the estimates, budgeteers will probably want to wait until the last possible moment to put hard numbers in the appropriations bill. They're still on a fast track and still hope to have a lot of the work done early this year. But final action probably won't be taken until the end of the session, just like always.

Rodney Ellis of Senate Finance and Rob Junell of House Appropriations want answers by mid- to late-March, if possible, from a group that includes Reps. Garnet Coleman, Craig Eiland and Kyle Janek, and Sens. Robert Duncan, Steve Ogden and Judith Zaffirini. In April, new numbers will be in. Those numbers are the ones that keep changing, bringing little moments of joy like when the HHS folks told budgeteers they'll need an additional $650 million to make their books balance.

The Medicaid team has already started meeting. Meanwhile, the budget folks are ready to start "marking up" the budget, transforming what they began with into what they will finally approve. One thing they're not working on in that forum is the effort by some legislators to make it easier for people who are already eligible for Medicaid to sign up for the benefits. That, like last session's battle over the Children's Health Insurance Program, or CHIP, is one to watch.

One step along the way will be creation of a wish list, a catalogue of spending ideas that can be incorporated if the money is available. What makes it onto that list will depend on final numbers for spending overruns in Medicaid, deals on teacher insurance, prison and state employee pay and a couple of other issues lawmakers really want. And it'll depend on who's right about how much money is available to spend, and whether that amount should include reserves like the rainy day account.

They're already working with some of the new money they've dug up. Money in one part of the prisons budget, for instance, can be scooted over to cover pay raises for corrections officers (that's not the end of the fight, however, as the budgeteers put in less money than what prison officials were after, and prison officials were after less money than the guards think it will take to end turnover and keep experienced guards on the job). And there may be another $150 million more than expected in the accounts filled by the state's settlement of the giant tobacco lawsuit a couple of years ago.

Bipartisan, to a Point

The Associated Republicans of Texas, a conservative group that raises and spends its money independently of the Texas Republican Party, is circulating a letter asking GOP legislators to stick together on redistricting. ART's letter starts by reminding members it never asks them to vote a party line, except when it comes to drawing political districts. It even applauds Republicans and Democrats working together on other kinds of legislation.

Then it gets to the business at hand, saying that Republican legislators should ignore current incumbents and put the overall number of Republicans first. "What we ask in a plan is that it be fair, compact districts and communities of interest be considered, minority districts be protected, and Republicans be represented by someone who shares their political views." The letter, from William McMinn, the group's finance chairman, points out that Republicans have been trying to win the Legislature for years: "Millions of dollars have been spent and very little has ever been asked in return," he writes. It doesn't ask for support for a particular plan, but closes by asking members to sign an enclosed survey spelling out their support for ART's position.

Correction, sort-of: A reader (guess from which party) points out that the Republican argument on redistricting (58 percent of the vote was GOP and so 58 percent of the Legislature should be GOP) is the same argument Democrats made after the presidential election. Al Gore, like the Republicans in the Texas Legislature, got more votes nationwide than his opposition, but that's not how you count.

You Just Can't Keep 'em Down on the Ranch

A group of East Texas legislators will not be flying to South Texas on Tony Sanchez Jr.'s plane to meet with the officially undeclared gubernatorial candidate. They were going to, for all of about 24 hours. That was the elapsed time, more or less, from the time Rep. Barry Telford, D-DeKalb, sent out a memo/invitation until he retracted it.

The plan was to get a group of East Texans together to go to Laredo in early March to meet, eat lunch and "to get acquainted with Mr. Sanchez prior to his making a decision about a possible gubernatorial candidacy." The memo looked like official state business, with the exception of the "not printed at state expense" disclaimer at the bottom, and said members could contact an aide in Telford's Capitol office about the visit to South Texas.

Telford said later that Sanchez had asked him to get a group together, offered a plane ride, but that, "upon further reflection," Telford decided it would be better not to make the trip during the legislative session. He said Sanchez, whom he himself has never met, would be welcome to come up to Austin and meet with the lawmakers. Aides to Sanchez say the trip to Laredo wasn't the uncampaign's idea at all, but was pitched to Sanchez and company by the House members.

We tapped around to see whether any other legislative delegations had gotten or made offers and didn't find any. But several lawmakers and others have made the pilgrimage to Sanchez' ranch to talk about the 2002 statewide races.

Even if the timing and presentation had been copacetic, some members thought the protocol was upside down. They found it weird that they would be flying down to see Sanchez, instead of having the untried candidate coming to them to ask for support and help as is normally the case. Chances are that if Sanchez and the East Texans meet during the legislative session, it'll be in Austin.

Meanwhile, add a couple of faces to the Democrat's budding exploratory campaign. After working out of Florida for several years, Robin Rorapaugh, a veteran of several political races in Texas, is coming back with the title of campaign manager for Sanchez. She worked on campaigns for former Attorney General Dan Morales, and for Bill Clinton and Al Gore in 1992, among others. Her most recent Texas experience was running the Richard Fisher campaign when the Dallas investor ran for U.S. Senate against Kay Bailey Hutchison. Rorapaugh was campaign manager for the last several months of Buddy McKay's Florida gubernatorial race against Jeb Bush in 1998. She is currently the chief of staff for a Florida congressman. Also on board: Paul Maslin, a pollster whose most prominent client is Gray Davis, the governor of California.

Not Exactly a Bright Line

Comptroller Carole Keeton Rylander got snapped in the Dallas Morning News at the beginning of the month for sending out fund-raising letters during the legislative session, though the letters were for a group that supports her and not for her own campaign.

One of the lines of defense was that others do the same thing, and that's true, to a point. But Rylander went further than the others, actually making the fundraising pitch in a signed letter that bore the seat of her state office at the top, while they simply lent their names to the cause. On the other hand, Rylander was helping a group—the Texas Public Policy Foundation—that doesn't make political contributions like some of the groups helped by other officeholders.

A couple of contemporary examples from the fundraising stack: Sen. Leticia Van de Putte, D-San Antonio, offered her name up as a roast victim at the Texas Women's Political Caucus fundraiser on March 9. Example: And Karl Rove, now working in the White House, has become a fundraising draw. He'll be the featured guest of Travis County's Republican Party on March 30. Lt. Gov. Bill Ratliff is on board as keynote speaker, and the object is to raise money for the local party.

Crime Scene

Criminal justice legislation is moving faster than anything else at the moment. To wit: The hate crimes bill will come up in House committee this week, and is already out of Senate committee. Sen. Robert Duncan's DNA testing bill is sailing toward the lower chamber.

And a bipartisan group of senators has unveiled an indigent defense bill that would set standards for court-appointed lawyers, regulate the way lawyers are appointed, and require some reporting on what happens in the future. Related: Sen. Rodney Ellis says he'll try to get some state funding for indigent defense programs. That's been tried before, but Ellis wasn't the chairman of the Senate Finance Committee then. The sponsors on the indigent defense bill include Ellis, Duncan, and Sen. Chris Harris, R-Arlington. Though it's outside the charter of the Texas Supreme Court (criminal appeals go to the Texas Court of Criminal Appeals), Chief Justice Tom Phillips included a call for indigent defense improvements in his State of the Judiciary remarks last week.

The pieces of this that are more or less agreed to include the DNA and indigent defense bills, and to a lesser extent (read that to mean it's more controversial), creation of a sentence of life without parole. The governor has signed off on that last one, as have a number of lawmakers, but it still rankles some prosecutors and could face opposition from some lawmakers.

Left out of the "generally agreed" package was legislation that would exempt mentally retarded killers from the death penalty. It failed two years ago, but it's back. That's often called the Penry bill, after death row inmate Johnny Paul Penry. Penry's case is currently on appeal in the federal courts, and some officeholders—notably Gov. Perry and Attorney General John Cornyn—left the issue off of their lists of reforms for that reason. But Ellis, who filed the bill two years ago, will try again. His bill would prevent the state from executing anyone with an I.Q. of less than 70. Similar legislation got through the Senate two years ago but never got to the floor of the House for a vote.

Ellis is also working on a pardons and paroles bill that would force that 18-member board to meet in person to consider cases instead of reading files about them and faxing in their votes. That method is legal but has led to criticism that the board isn't deliberating like it should.

The Trouble with Elections

If anything's moving as quickly as criminal justice, it's probably election and campaign finance reform. The difference is that the changes in criminal justice—it seems weird to say this—are much less controversial. The Senate and the House are pursuing different approaches to campaign finance reform, and there's a disagreement brewing within the House itself. Rep. Jerry Madden of Richardson has been the most prominent House Republican working on the issue; he's saying a couple of the bills that are in the system would hurt challengers and help incumbents. Those bills have the low numbers that often signal support from the Speaker of the House, but Madden has filed a competing bill on campaign finance reform that contains some of the same elements that are in the leadership package. He's specifically shooting at provisions that would create contribution limits in state political races and a bill that calls for nonpartisan election of judges.

That last one puts him in opposition to Phillips, who used that same speech on the judiciary to say that judicial selection is the biggest problem in the courts. He's pushed merit selection systems in the past, which would allow judges to be appointed and then run in so-called retention elections. As an alternative, he suggests non-partisan, publicly funded contests for the bench.

The semi-related push for uniform election dates pits city councils against school boards, at least on the subterranean level. The uniform dates are great for city elections and the like, but some contend that the bigger turnouts are bad for bond issues and referenda. Whatever, the legislation from Sen. Florence Shapiro, R-Plano, has legs because of the turnout burnout caused when voters have to go to the polls every few weeks. Shapiro says Dallas County has had 100 elections in the last ten years. Madden says taxpayers in various parts of the state spent $2.7 million in 1998 and 1999 on 328 elections that occurred on non-uniform dates.

Gas Pains, Miscellany

The Texas Railroad Commission can't do a darn thing about high natural gas prices in most parts of the state, but they're holding a conference at the end of the month to talk about those prices.

One proposal would give pipeline companies more control over gas purchasing. Cities generally buy gas and the pipeline companies pass it through without adding to the gas price. But some complain that city councils are afraid to sign long-term contracts to lock prices in, since the prices in those contracts are almost always higher than spot prices. On the other hand, long-term contracts protect buyers from the kinds of fluctuations that are driving people nuts right now.

Neither is a slam-dunk option, and elected officials, the thinking goes, don't have any incentive to make a hard decision about buying natural gas. Giving the pipeline folks the option would make it possible to lock in prices without requiring it. And it would give the city council types a bit of insulation from voters who might not want to wait around to see if a council member's guess about prices was on the mark. RRC will have a bigger conference later, but wants one now because the issue is hot and because the Legislature is around to act on any recommendations that might emerge.

• Attorney General John Cornyn's official opinion is that only law enforcement and other government officials can make use of the magnetic stripe on the back of Texas drivers' licenses. But the opinion nods at legislation that could change that. The info on that stripe is limited, at the moment, to the information that's printed on the license. The Texas Department of Public Safety asked for the opinion from the AG, noting that stores and bars and hotels and others want to use the stripe for age identification and other stuff. DPS is working on rules on the subject; in a footnote on his opinion, Cornyn said they should watch a couple of proposed bills that would allow retailers to use the information to confirm ages and for verifying checks.

• The Texas Freedom Network, started as a foil to the religious right in Texas politics, beefed up its website. You can peek, at www.tfn.org.

• Think you know a little something about job pressure? Try being the state auditor. Rep. Rob Junell, the chairman of the House Appropriations Committee, has filed a bill that would make Larry Alwin prove himself every two years. The Legislative Audit Board would reconsider his employment before every legislative session.

The Other Book of Numbers

Start this with a disclaimer: The numbers you are about to see are not from the new U.S. Census, but from the big, fat Statistical Abstract of the United States: 2000 (available online from the Census Bureau. It's a cool set of numbers for policy wonks and speakers, and it's the best thing going until the feds release a full set of data from last year's Census. A sampling:

• Consumer spending online totaled $7.7 billion in 1998, $17.3 billion in 1999, and was estimated at $28 billion in 2000, led by spending on air travel, computers and books.

• 95 percent of schools had Internet access in 1998, and two-thirds of teachers use computers in the classroom, both with and without using the Internet.

• Average cost of each day of holding an inmate in U.S. prisons was $55.18 in 1996. The high was $103.63, in Minnesota. The low was $21.88, in Alaska. Texas costs were below average, at $33.47.

• There were 59,000 people in the U.S. over the age of 100 in 1999. About 11,000 of them were men; about 49,000—more than four times as many—were women.

• In the year 2025, Texas will have a population of 27.2 million.

• Trucks outsold cars for the first time in American history in 1999. Blame SUVs.

• Medicaid grants from the federal government to local and state governments totaled a projected $116 billion in 2000, up from $43 billion in 1990.

• Only 72.1 percent of Texans in 1990 were high school graduates; by 1999, that percentage had risen to 78.2 percent. The national average also rose, and in spite of its improvements, Texas continued to lag. Nationally, 83.4 percent of adults had at least a high school diploma.

Political People and Their Moves

Put former Rep. Ric Williamson at the top of the list of people being considered for an open seat at the Texas Department of Transportation. David Laney's term is technically over, and replacing him will be one of the first high profile appointments made by Gov. Rick Perry. The Guv is also looking to fill other big jobs, including a spot on the Texas Supreme Court, regents' positions at the major university systems, and the Public Utility Commission. That last one will take some time, but the short list, at least at this date, includes Stephanie Kroger and Becky Armendariz. Kroger is a lobbyist who's been working on electric issues for years; Armendariz is a former PUC staffer who worked for former Gov. George W. Bush on utility policy. The next opening, as far as we know, will come from the departure of Judy Walsh, an accountant appointed by Bush who's term technically ended at the beginning of the month. She has said she'll leave when Perry names her replacement. Terms of a mess of board and commission members ended on January 31 and February 1. Bush left them for Perry to do, and it's gonna take them a little time to catch up. Some of the political plums include the Parks & Wildlife Board, Insurance Commissioner and the Public Safety Commission... Fred Richardson has signed on with the Sierra Club's Austin operation. He was with Texans for Public Justice, and did a couple of projects on the East Coast before showing up with the environmental group. That outfit also recently added Erin Rogers, who used to work for Rep. Lon Burnam, D-Fort Worth... Clarification: Marc Samuels is, in fact, moving over to Hillco Partners, but his existing business will remain separate from Hillco business, he says. That'll keep the conflicts to a minimum... News from the University of Texas Empire: Dr. Charles Mullins is giving up the post of executive vice chancellor for health affairs and will become a cardiology faculty member. He's been the boss of the UT medical schools for 20 years. On a nearby front, Dr. James Willerson is the sole finalist to be president of the UT Health Science Center in Houston, replacing David Low. Trend-spotting? Willerson is a cardiologist. And UT Permian Basin has a new president; W. David Watts, who had been an administrator at a college in Alabama, will take over for Charles Sorber, who is returning to the faculty at UT Austin... More Pollies. We didn't have the whole list in hand last week (and we're probably missing some Texas outfits in this listing), but the awards from the American Association of Political Consultants are in. Hendrix, Elder & Associates got an award for a mailer for the Bob Deuell for state Senate race. Austin-based Rindy Miller Bates got in with a radio ad for a South Carolina legislative race. Jeff Montgomery & Associations, also of Austin, made the list with a TV ad for the Nueces County Democratic Party. Special awards included a couple folks whose name you might have heard during their toils for President Bush. Karl Rove got a Pollie for Campaign Manager of the year. And GOP attorney Benjamin Ginsberg was the AAPC's "Most Valuable Player in a Campaign—Republican."

Quotes of the Week

South Carolina Gov. Jim Hodges, on the turning economy's toll on his state budget: "We had a couple-hundred-million-dollar surplus last year, and now it's dried up and we're cutting state government by 15 percent... But a lot of other states are going through the same thing, and when the economy slows down, it eventually happens to everyone."

Janet Oseroff, a telephone calling-card customer dinged by add-on charges, as quoted in The New York Times: "It said no hidden charges from other phone companies, so I thought that meant no hidden charges from other phone companies."

An anonymous corrections officer from Beeville talking about the effects of low pay on prisons in the state, as quoted in the Fort Worth Star-Telegram: "Now you have teenagers with pimples on their face and butts the size of semis trying to keep order. They couldn't run 100 yards, much less defend themselves in a fight. That's why we're having these problems right now."

The Texas Alcoholic Beverage Commission's Randy Yarbrough, on whether online wine sales attract teens: "Kids generally do not want to buy alcohol over the Internet. They want it for tonight."

Texas Weekly: Volume 17, Issue 32, 19 February 2001. Ross Ramsey, Editor. George Phenix, Publisher. Copyright 2001 by Printing Production Systems, Inc. All Rights Reserved. Reproduction in whole or in part without written permission from the publisher is prohibited. One-year online subscription: $250. For information about your subscription, call (800) 611-4980 or email biz@texasweekly.com. For news, email ramsey@texasweekly.com, or call (512) 288-6598.